Moneymen find profit in firings

It has been a good week on the Frankfurt stock exchange. Investors, cheered by news from the job market and the corresponding plunge in the Deutschmark, poured their money into German companies, matching the post-war record in unemployment with an all-time high for the Dax shares index.

One of the star performers in Frankfurt's bull run was Siemens, a large exporter of German electrical goods and jobs, which announced a leap in profits. Siemens sacked 6,000 workers last year, but wants to raise its return on investments to American levels by the year 2000. To get nearer that goal, the company will fire another 6,000 of its employees by the end of the year.

This is not how things are supposed to be done in Germany, the home of "Rhenish capitalism" which puts the workers' interests first, the bosses' second and shareholders' last. The model gave the world the economic miracle and almost unparalleled prosperity, built on harmonious labour relations, a cartel-like economy of cross-ownership, and consensus politics.

The system suited everybody for five decades, but it no longer suits the moneymen. An increasing number of German companies, their managers bewitched by Anglo-Saxon phrases, such as "shareholder value" and "globalisation", are forsaking the German model.

The malaise of down-sizing is spreading from the north, cutting across the Ruhr, and its effects can even be felt in the land of the "sunrise industries" in the south. Bavaria and Baden-Wurttemberg, where the unemployed might have been heading a few years ago on their bikes, both have a higher jobless rate now than Britain.

As for the East, the trillion Deutschmarks invested since unification has failed to create more jobs than Poland, Hungary and the Czech Republic achieved without the help of German tax-payers.

There are, of course, many affluent oases on this bleak landscape. Parts of eastern Germany now boast the most modern production methods in the world, which in years to come will pay rich dividends. The chemical sector in the West is booming, there are jobs galore in biotechnology and computing, and car manufacturers are conquering new markets and holding their own at home.

But those that remain successful have done so by shedding labour, often in the teeth of resistance from unions and politicians. Volkswagen started from scratch in eastern Germany, negotiating wages and work practices that would not be accepted by western unions. Daimler-Benz, the country's largest industrial concern, has sacked tens of thousands of workers on its way towards renewed profitability.

White collar unemployment is still rare, but it is coming. Jobs in the public sector which used to enjoy civil-servant status are increasingly being offered on a contractual basis. There are openings in the service sector. New hotels in eastern Germany are seeking receptionists.

Economists and long-suffering consumers agree that there is scope for improvement. There must be thousands of unemployed hairdressers, yet you cannot get a haircut in most of Germany on Mondays.

Will customer-friendly hairdressers save Germany from ever-higher levels of unemployment? Some experts doubt it. "The trouble is that jobs are simply disappearing faster than they are being created in services," says Peter Frieburg of Duisburg's labour exchange. But at least there are bound to be new opportunities in the leisure industry.

Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
art
News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
Travel
travel
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
News
i100This Instagram photo does not prove Russian army is in Ukraine
News
Morrissey pictured in 2013
people
Sport
sportVan Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Life and Style
Martha Stewart wrote an opinion column for Time magazine this week titled “Why I Love My Drone”
lifeLifestyle guru Martha Stewart reveals she has flying robot... to take photos of her farm
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Environment
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
News
people
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

VB.Net Developer - £40k - Surrey - WANTED ASAP

£35000 - £40000 per annum + competitive: Progressive Recruitment: .Mid Level V...

Digitakl Business Analyst, Slough

£40000 - £45000 per annum + Competitive Benefits: Progressive Recruitment: Dig...

Mechanical Estimator: Nuclear Energy - Sellafield

£40000 - £50000 per annum + Car, Medical, Fuel + More!: Progressive Recruitmen...

Dynamics NAV Techno-Functional Consultant

£50000 - £60000 per annum + benefits: Progressive Recruitment: An absolutely o...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices